Health insurance open enrollment gets all the attention, but there's a quieter option that's been growing fast: short-term health plans.
These policies can cost a fraction of a traditional plan, sometimes under $100 a month for a single adult.
That price tag is pulling in gig workers, early retirees, and anyone stuck between jobs.
The catch is what these plans don't cover.
Short-term policies, which are technically "limited duration" plans, aren't required to follow the Affordable Care Act's rules.
That means they can deny coverage for pre-existing conditions, skip maternity care, leave out mental health treatment, and charge you more based on your age or health history.
Prescription drug coverage is often thin or capped.
Under the ACA, your yearly out-of-pocket costs on a marketplace plan are capped at around $9,200 for an individual in 2024.
Short-term plans can set their own limits, and some cap benefits at $250,000 or even less for the entire policy period, not per year.
A single hospital stay can blow past that.
The plans also aren't guaranteed renewable.
If you get sick and need to renew, the insurer can look at your new health status and either raise your rate dramatically or refuse to renew altogether.
That's the opposite of how ACA plans work, where you can't be dropped just because you got expensive to insure.
Consumer advocates say they make the most sense as a stopgap, maybe a few months between a job loss and new coverage, if you're generally healthy and have cash set aside for a worst-case scenario.
They're a poor fit if you take regular medications, have a chronic condition, are pregnant or planning to be, or have kids who need pediatric care.
What's the maximum the plan will pay out in total?
Does it exclude anything I currently treat or take medication for?
And can the company cancel or refuse to renew if I get sick?
Get the answers in writing, not from a sales script.
If you're between jobs, a marketplace plan may actually be cheaper than it looks.
Expanded subsidies under the Inflation Reduction Act have made many bronze and silver plans low-cost or even $0 for households under certain income levels.
Losing job-based coverage also triggers a special enrollment period, so you don't have to wait until November.
A licensed navigator at Healthcare.gov or a state exchange can run the numbers for free.
The bottom line is that a low premium isn't the same as low risk.
Short-term plans trade comprehensive protection for a smaller monthly bill, and that trade can look very different once you actually need care.
If you're healthy, solvent, and truly just bridging a gap, one might work.
Final Thoughts
Otherwise, spend twenty minutes checking your subsidy options first.